With blockchain technology, it’s often difficult to distinguish the hype from the reality, especially as Bitcoin has skyrocketed in valuation in a very short space of time. You sense much of this has been driven by people who largely misunderstand the technology and what it can do.
A recent report from the International Development Research Centre aims to go beyond the hype and explore the potential for blockchain technology to support human development. It aims to do so in a non-technical way, both outlining a number of potential applications and providing recommendations for additional work to be done.
Blockchain in development
The report outlines how blockchain technology can be used to support e-government initiatives that aim to provide a range of public goods to citizens. It’s particularly useful in areas that demand personal interaction and individual identification. Healthcare for instance or the management of public documents. Other institutions are using it to support e-voting or the secure transfer of aid funding overseas.
Despite this early promise however, the deployment of blockchain technology has been limited, especially in the developing world. The report outlines however how tech hubs and entrepreneurs in these regions are helping to accelerate experimentation. It highlights some interesting examples in areas such as banking and agriculture to ensure those that have been ignored by legacy systems are better served. It’s a technology that the authors believe has significant potential to improve human development.
“Blockchain technology has the potential to support and enhance development programming and democratic governance, but the sophistication and complex infrastructure requirements, such as highly developed skills, operating costs, and energy consumption, could continue to prove challenging if countries intend to be active players and not just consumers,” the authors say.
They believe that the best chances of success lay in areas such as smart government, with blockchain used as a catalyst to deliver public goods more effectively and efficiently. They also suggest however that an expansion in the capacity of local technology infrastructure can, when coupled with a boost in financial resources, provide the spur to develop local blockchain applications.
To support this, they recommend policy and regulatory capacity to be set aside to support such development, and capacity generated within public institutions to enable blockchain to be integrated into their existing service models.
“Governments need to understand these complex challenges in order to ensure sound governance, close development gaps, foster social inclusion, and promote democratic governance,” the authors conclude.